QLS says new disclosure regime is not responsible for failed property deals
With sellers continuing to adjust to Queensland’s property law reforms introduced last August, the Queensland Law Society (QLS) did not attribute gazumping or failed property deals to the state’s new seller disclosure regime.
Under the recent property reforms, a seller should disclose important property information – including body corporate records, planning and zoning details, and registered encumbrances – before a buyer signs the contract, rather than during the contract phase.
Peter Jolly, the law society’s president, drew a clear distinction between longtime market behaviour and the new seller disclosure regime, which aims to promote transparency and streamline the purchasing process to benefit buyers and sellers alike.
“Buyers have transparency about what they're buying, and sellers have the confidence to know that when they get to a contract stage, the contract is more likely to go all the way to completion,” he said in a media release.
Jolly pointed out that the new seller disclosure laws do not affect listing strategies, set deadlines, or provide negotiation processes.
"If you buy a product or a car, you expect to get a lot of information about the product or the car before you buy it,” he said. “So, it's not unreasonable that the same process should apply when you make the biggest investment decision that you might ever make.”
The QLS explained that gazumping occurs when a seller accepts a higher offer after a verbal agreement but before the signing of a binding contract. The law society added that how sellers and agents manage offers and market properties drives gazumping in competitive property markets.
“Gazumping, relates to how a sale is handled, and in that respect many of the underlying dynamics that existed prior to the regime remain unchanged,” Jolly said in the law society’s media release.
Having helped prepare the reforms, Professor Sharon Christensen of the Queensland University of Technology (QUT) noted that they simply brought the state in line with other Australian jurisdictions and with overseas markets that have similar disclosure regimes.
“What we’re seeing now is the disclosure regime working exactly as it was designed,” Christensen said. “Buyers are making decisions with their eyes open, before they are legally committed, which is the most effective way to reduce risk and regret in property transactions.”
According to Sarah De Jong, a first home buyer, the new seller disclosure regime provided “a real sense of comfort that we really knew what we were buying, what our hidden costs may have been, what our hidden future might have looked like in relation to this property.”
